What Drives Bank Profitability? A Panel Data Analysis of Commercial Banks in Bangladesh

Bank profitability plays a significant role in the growth and development of an emerging economy. The purpose of the study was to examine the impact of bank characteristics, industry concentration and macroeconomics variables on commercial bank profitability in Bangladesh from 2007-2017. Bank profitability is proxied by return on assets (ROA), return on equity (ROE) and net interest margin (NIM). The study is based on secondary data and Hausman test has been performed using STATA software in favor of fixed effect modeling. Panel regressions shows that cost efficiency has significant negative impact on ROA and NIM. The positive impact of loan to deposit ratio with ROA suggests that efficient fund management including investment and assessed expenditure should be emphasized. Bank size has significant negative impact on all the measures of profitability, which indicates that monopolistic competition will reduce banking profit. Credit risk has significant positive impacts on ROE. Industry concentration measured by CR3 is positively related with ROE and has significant negative relation with bank profitability (ROA). Among macroeconomic variables inflation has significant positive and bank spread has significant negative impact on ROE. The coefficients of all the macroeconomic variables have been found to be significantly related to bank profitability while measured by NIM. Our study recommends further research with other explanatory variables such as, corporate governance, corporate social responsibility (CSR) and deposit insurance to accelerate the model and construct the econometric model by using structural equation modeling, mediation effect modeling etc.

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Macroeconomic factors and stock returns: Evidence from the emerging market of Asia

Journal of Economic Info ◽

10.31580/jei.v5i3.99 ◽

2018 ◽

Vol 5 (3) ◽

pp. 16-20

Author(s):

Muhammad Asad Saleem Malik ◽

Saher Touqeer ◽

Shumaila Zeb

Keyword(s):

Exchange Rate ◽

Stock Returns ◽

Negative Impact ◽

Positive Impact ◽

Emerging Market ◽

Consumer Price Index ◽

Macroeconomic Factors ◽

Macroeconomic Variables ◽

Significant Negative Impact ◽

The Impact

This study examines the impact of macroeconomic variables on stock returns of Pakistan, India and Sri Lanka for the period of 1997-2014. GMM approach is used to analyze the impact of macroeconomic variables on stock returns. Variables of the study were T-Bills, Exchange Rate, Consumer Price Index (CPI) and the Industrial Production Index (IPI). The results of study show that T-bills rate has significant negative impact while Exchange rate has a significant positive impact on the Stock Returns of the study period.

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IMPACT OF CREDIT RISK ON PROFITABILITY OF COMMERCIAL BANKS IN NEPAL

Journal of Applied and Advanced Research ◽

10.21839/jaar.2018.v3i6.230 ◽

2018 ◽

Vol 3 (6) ◽

pp. 161

Author(s):

Shiva Raj Poudel

Keyword(s):

Credit Risk ◽

Commercial Banks ◽

Negative Impact ◽

Positive Impact ◽

Panel Data Analysis ◽

Fixed Effect Model ◽

Capital Adequacy ◽

Return On Equity ◽

Significant Negative Impact ◽

The Impact

The main purpose of the study was to examine the impact of credit risk on profitability of the commercial banks in Nepal. Data were collected from the sample of 15 commercial banks operated in Nepali economy for the period of 2002/03 to 2014/15. One way Fixed Effect Model (FEM) of panel data analysis is used as a major tool of analysis. The profitability of the commercial banks is measured in terms of return on equity and is regressed on bank specific variables and macro-economic variables. The results confirmed that credit risk has the significant negative impact on profitability of commercial banks in Nepal. In addition, solvency ratio, interest spread rate, and inflation have the insignificant negative impact on profitability. In contrast, capital adequacy ratio, total assets, and GDP growth have the significant positive impact on profitability of commercial banks in Nepal. Finally, inter-bank interest rate has insignificant positive impact on profitability.

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Impact of Macroeconomic Factors on Stock Returns of KSE 100 Index

Journal of Business & Tourism ◽

10.34260/jbt.v4i1.95 ◽

2021 ◽

Vol 4 (1) ◽

pp. 133-145

Author(s):

MUHAMMAD TAHIR KHAN ◽

ASAF KHAN ◽

DR. ADNAN AHMAD ◽

OBAID ULLAH BASHIR

Keyword(s):

Stock Returns ◽

Stock Return ◽

Inflation Rate ◽

Negative Impact ◽

Positive Impact ◽

Forecast Error ◽

Macroeconomic Factors ◽

Macroeconomic Variables ◽

Significant Negative Impact ◽

The Impact

Positive moment of stock return is an important component for investors, the intension of this study was to examine the impact of macroeconomic variables on stock return. The monthly stocks price data of 15 firms was taken from the period of January 2008 to December 2012. The results revealed that there was a positive impact of exchange rate on stock return, while inflation rate and interest rate had a significant negative impact on stock return. The results of variance decompositions revealed that out of three macroeconomic variables Inflation rate showed greater forecast error for KSE 100 Index

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The Impact of the Business Environment on the Formalization of Informal Firms. The Case of Kosovo

Südosteuropa ◽

10.1515/soeu-2020-0035 ◽

2020 ◽

Vol 68 (4) ◽

pp. 505-529

Author(s):

Kujtim Zylfijaj ◽

Dimitar Nikoloski ◽

Nadine Tournois

Keyword(s):

Negative Impact ◽

Positive Impact ◽

Business Environment ◽

Positive Influence ◽

Policy Implications ◽

Tax Reforms ◽

Firm Level ◽

Characteristics Analysis ◽

Significant Negative Impact ◽

The Impact

AbstractThe research presented here investigates the impact of the business environment on the formalization of informal firms, using firm-level data for 243 informal firms in Kosovo. The findings indicate that business-environment variables such as limited access to financing, the cost of financing, the unavailability of subsidies, tax rates, and corruption have a significant negative impact on the formalization of informal firms. In addition, firm-level characteristics analysis suggests that the age of the firm also exercises a significant negative impact, whereas sales volume exerts a significant positive impact on the formalization of informal firms. These findings have important policy implications and suggest that the abolition of barriers preventing access to financing, as well as tax reforms and a consistent struggle against corruption may have a positive influence on the formalization of informal firms. On the other hand, firm owners should consider formalization to be a means to help them have greater opportunities for survival and growth.

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Determinants of Basmati Exports from Pakistan: A Panel Data Analysis

Journal of Economic Impact ◽

10.52223/jei3012102 ◽

2021 ◽

Vol 3 (1) ◽

pp. 12-18

Author(s):

Muhammad Munwar Hayat ◽

Raheela Khatoon

Keyword(s):

Panel Data ◽

Method Of Moments ◽

Negative Impact ◽

Positive Impact ◽

Panel Data Analysis ◽

Generalized Method Of Moments ◽

Trading Partner ◽

Dummy Variable ◽

Export Competitiveness ◽

The Impact

This paper aims to estimate the impact of different factors of basmati exports from Pakistan to its trading partner. Results are obtained by using the Generalized Method of Moments (GMM) model and panel data methodology with a sample of 22 countries for the period of 2003-2019. To estimate the impact of different variables on basmati exports Generalized Method of Moments (GMM) model is used on the panel dataset. The results revealed that the inflation rate of Pakistan has a negative and significant effect on the export competitiveness of Pakistani basmati. The exchange rate of Pakistan has a positive and significant impact on the basmati export, the population of Pakistan has a negative and significant impact on basmati export. Basmati production in Pakistan also has a significant and negative impact on basmati export. The Gross Domestic Product (GDP) of Pakistan has a significant and positive impact on the basmati export while the GDP of the trading partner has a significant and negative impact on the basmati export. The dummy variable for joint border also has a positive and significant impact on basmati exports of Pakistan.

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Effects of dietary patterns on driving behaviours among professional truck drivers: the mediating effect of fatigue

Occupational and Environmental Medicine ◽

10.1136/oemed-2020-107206 ◽

2021 ◽

pp. oemed-2020-107206

Author(s):

Yan Ge ◽

Shanshan He ◽

Yan Xu ◽

Weina Qu

Keyword(s):

Pathway Analysis ◽

Dietary Patterns ◽

Negative Impact ◽

Positive Impact ◽

Truck Drivers ◽

Mediating Effect ◽

Mediation Effect ◽

Driving Behaviour ◽

Staple Foods ◽

The Impact

ObjectiveTo explore the impact of the dietary patterns of truck drivers on their driving behaviours and the mediation effect of fatigue between these factors.MethodsA sample of 389 male truck drivers from a transport company in Suzhou, China completed the Food Frequency Questionnaire (FFQ), the Multidimensional Fatigue Inventory (MFI), the Positive Driver Behaviours Scale (PDBS) and the Driver Behaviour Questionnaire (DBQ). The associations among dietary patterns, fatigue and driving behaviour were examined using pathway analysis.ResultsFour dietary patterns were identified based on principal component analysis: animal-derived foods, staple foods, snacks and vegetables. The pathway analysis showed that the vegetable-rich pattern had a direct positive impact on positive driving behaviour (β=0.211, p<0.001); the animal-derived pattern had a direct positive impact on errors (β=0.094, p<0.05) and ordinary violations (β=0.071, p<0.05); the snacks pattern had a direct negative impact on positive driving behaviour (β=−0.191, p<0.001); fatigue mediated the effect of dietary patterns on driving behaviours (p<0.001); and the staple foods had an indirect effect on driving behaviours.ConclusionsOverall, the driving behaviours of truck drivers are correlated with their dietary patterns. Drivers who preferred vegetables and staple foods had more positive driving behaviour, while the animal-derived food and snack patterns were related to dangerous driving behaviour. The experience of fatigue could explained the underlying mechanism between these factors.

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A Comparative Study Using Two SEM Techniques on Different Samples Sizes for Determining Factors of Older Employee’s Motivation and Satisfaction

Sustainability ◽

10.3390/su12062189 ◽

2020 ◽

Vol 12 (6) ◽

pp. 2189 ◽

Cited By ~ 2

Author(s):

Maja Rožman ◽

Polona Tominc ◽

Borut Milfelner

Keyword(s):

Structural Equation Modeling ◽

Structural Equation ◽

Negative Impact ◽

Positive Impact ◽

Employee Motivation ◽

Equation Modeling ◽

Older Employees ◽

Employee Relationships ◽

Employee Stress ◽

The Impact

The purpose of this article is to present the relationships among older employee stress, motivation, satisfaction, and relationships in the workplace using two different approaches and different sample sizes. Research was implemented on an initial sample of 1013 older employees. In the next step, six smaller samples were calculated using the random selection of cases, namely samples with 25, 50, 100, 250, 400, and 500 older employees. This way the possible impact of sample size on relationships between latent variables using the covariance-based structural equation modeling (CB-SEM) and the partial least squares structural equation modeling (PLS-SEM) methods was assessed. The results on the larger samples have proved to be quite robust since they were confirmed with both approaches. They indicate that stress has a strong and negative impact on employee relationships and also a negative impact on employee satisfaction. Furthermore, employee relationships have a strong and positive impact on satisfaction and a positive impact on employee motivation. In addition, satisfaction has a strong and positive impact on employee motivation. The present paper helps readers to better understand the difference between the CB-SEM and the PLS-SEM methods. Researchers should be encouraged to use both techniques, even though CB-SEM methods have had a long tradition in management and marketing research since both fields heavily rely on psychometric measurement. From the organizational point of view, conclusions highlight the importance of the impact the variables of older employee stress, motivation, satisfaction and employee relations have on each other in the workplace.

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Determinants of Non-Performing Loan in Nepalese Commercial Banks

Economic Journal of Development Issues ◽

10.3126/ejdi.v19i1-2.17700 ◽

2017 ◽

pp. 22-38 ◽

Cited By ~ 1

Author(s):

Seema Bhattarai

Keyword(s):

Exchange Rate ◽

Commercial Banks ◽

Negative Impact ◽

Positive Impact ◽

Percent Level ◽

Real Effective Exchange Rate ◽

Macroeconomic Variables ◽

Effective Exchange ◽

Effective Exchange Rate ◽

The Impact

The non-performing loans (NPL) of financial institutions are considered as a significant issue in the context of Nepal for last few decades. The paper aims to identify the impact of macroeconomic variables (GDP, Inflation, and Real Effective Exchange Rate) and bank specific variables (size, change in loan, real lending rate of interest, and share of loan to total assets) on the non-performing loan of the commercial banks in Nepal. The study was conducted mainly with secondary sources. The data were collected for 26 commercial banks covering the period of 2002-2012 with 227 observations. The study found that macroeconomic variables such as the real effective exchange rate have significantly negative impact on non-performing loan. The impact of GDP growth rate was found to be insignificant in this study. One year lagged inflation rate has significant positive impact on non-performing loan. The banks which charge relatively higher real interest rate have higher non-performing loan, which is consistent with the findings of previous studies. The ownership dummy has positive coefficient and significant at one percent level showing that if the bank is government owned the non-performing loan would be higher than that of the private owned banks. As well, more lending in the previous years and current year reduces the non-performing loan since the coefficient of change in loan in current and previous years have negative coefficient and significant at one percent level.Economic Journal of Development Issues Vol. 19 & 20 No. 1-2 (2015) Combined Issue, Page: 22-38

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Scoring Models and Credit Risk: The Case of Cooperative Banks in Poland

Risks ◽

10.3390/risks9070132 ◽

2021 ◽

Vol 9 (7) ◽

pp. 132

Author(s):

Krzysztof Kil ◽

Radosław Ciukaj ◽

Justyna Chrzanowska

Keyword(s):

Statistical Data ◽

Negative Impact ◽

Positive Impact ◽

Review Of The Literature ◽

Management Board ◽

Panel Model ◽

Significant Negative Impact ◽

Cooperative Banks ◽

Lending Activity ◽

The Impact

The aim of the research presented in the article was to analyse the legitimacy of the use of scoring models in banking activities, together with the assessment of the effectiveness of this tool in reducing the high value of the NPL ratio in Polish cooperative banks on the example of banks belonging to the BPS S.A. association in the period between 2004 and 2020. We used a variety of research methods for this purpose including a depth review of the literature, analysis of statistical data regarding the sector of Polish cooperative banks, analysis of financial data of cooperative banks, construction of an econometric panel model, and the designing a questionnaire (which was later sent to the management board of selected cooperative banks). Our research confirmed the significant impact of the use of scoring models in lending activities on the value of the NPL ratio in cooperative banks. The analysed cooperative banks, which used the scoring models proposed by BIK in their lending activity, showed significantly lower values of the NPL ratio in each analysed year than banks that used other scoring models. Our study also confirmed the different direction of the impact of the models offered by BIK and individual scoring models on the value of the NPL ratio. We have also shown that the scoring models proposed by BIK have a statistically significant negative impact on the level of the NPL ratio, and the banks’ own scoring models have a statistically significant positive impact on the level of the NPL ratio.

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The Impact of Corporate Social Responsibility on the Financial Performance of Listed Companies in Thailand

Sustainability ◽

10.3390/su13168920 ◽

2021 ◽

Vol 13 (16) ◽

pp. 8920

Author(s):

Muttanachai Suttipun ◽

Pankaewta Lakkanawanit ◽

Trairong Swatdikun ◽

Wilawan Dungtripop

Keyword(s):

Financial Performance ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Panel Data Analysis ◽

Descriptive Analysis ◽

Listed Companies ◽

Annual Reports ◽

Corporate Social ◽

The Impact

This study aims to: (1) investigate the amount of corporate social and environmental responsibility (CSR) spending, awards, and activities of listed companies in the Stock Exchange of Thailand (SET) and in the Market for Alternative Investment (MAI); (2) test the impact of CSR spending, awards, and financial performance activities; and (3) examine the amount of CSR spending, awards, and activities between companies with and without a CSR committee. The sample included all the listed companies in the resource industry from the SET and the MAI. The data were collected from the companies’ annual reports from 2015 to 2019. Descriptive analysis, an independent-sample t-test, a correlation matrix, and an unbalanced panel data analysis were used to analyze the data. The average level of spending per activity was 2.2964 million baht. There were, on average, 2.1741 awards and 11.4178 activities during the studied period. Moreover, there was a significant negative impact of CSR spending, and a positive impact of CSR awards and activities, on corporate financial performance. Finally, there was a significantly different amount of CSR spending, awards, and activities between the companies with and without a CSR committee. The findings of this study demonstrate that legitimacy theory can be used to explain the benefit of CSR to Thai-listed companies, although CSR is still a voluntary corporate responsibility in Thailand.

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